9911796707
TMI Blog2014 (9) TMI 1268X X X X Extracts X X X X X X X X Extracts X X X X ..... oversy settled. The expose' of facts tells a different story. As submitted by the learned Counsel for CBI the manner in which the letters of credits were issued and the funds were siphoned has a foundation in criminal law. Learned Counsel would submit that it does not depict a case which has overwhelmingly and predominantingly civil flavour. The intrinsic character is different. Emphasis is laid on the creation of fictitious companies. In this context, we may usefully refer to a two-Judge Bench decision in Central Bureau of Investigation v. Jagjit Singh [ 2013 (10) TMI 1427 - SUPREME COURT ] wherein the court being moved by the CBI had overturned the order of the High Court quashing the criminal proceeding and in that backdrop had taken note of the fact that accused persons had dishonestly induced delivery of the property of the bank and had used forged documents as genuine. We are in respectful agreement with the aforesaid view. Be it stated, that availing of money from a nationalized bank in the manner, as alleged by the investigating agency, vividly exposits fiscal impurity and, in a way, financial fraud. The ultimate victim is the collective. It creates a haza ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assumed motto of not loading the system with unfruitful prosecution, of course with certain riders, one of which, as regards the cases pertaining to commercial litigations, appreciation of predominant nature of civil propensity involved in the lis or social impact in the backdrop of the facts of the case. The primary question that we have posed has a substantial supplementary issue; i.e. should the courts totally remain oblivious to the prism of fiscal purity and wholly brush aside the modus operandi maladroitly adopted, as alleged by the prosecution, on the part of industrial entrepreneurs or the borrowers on the foundation that money has been paid back to the public financial institutions. We think not, especially regard being had to the obtaining factual matrix in the case at hand. 2. Presently to the factual exposition. On the basis of a written complaint of chief vigilance officer, Bank of Baroda a case was registered against the Respondents on 6.1.2006 and after completion of investigation a report was filed before the Special Court, CBI cases, Mumbai with a prayer to forward the chargesheet to the learned Magistrate who was competent to take cognizance of the offence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the hypothecation of current assets such as stocks, stocks in trade, raw materials and book debts, and, that apart, one of the important terms and conditions was that the CC, WCDL and Term Loan amounts were to be directly paid to the company's account with the UTI Bank and Federal Bank so as to take over the liabilities as well as the securities mortgaged with the two banks. Despite the said situation, the Bank on 29.01.2003 intimated the sanction to ATCOM, the company in question. It is further demonstrable from the chargesheet that A-1 and A-2, with the intention to escape personal liabilities, made A-3 and one Mr. Chirag Gandhi directors in ATCOM and got all the loan documents including the Demand Promissory Note (DPN) signed by the said persons. The terms and conditions of the sanction was that the entire Working Capital of Rs. 570.00 lakhs (Rs. 114.00 lakhs + Rs. 456.00 lakhs) and the Term Loan of Rs. 360.00 lakhs were to be directly paid to the UTI Bank and Federal Bank. Consequently, the Term Loan was released and paid as per the sanction terms and conditions. As alleged, A-1 induced the Bank to release the sanctioned Working Capital Funds to the Current Account and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their bogus bills and portion of these discount proceeds were used for personal benefits of A-1 and a certain portion was routed back to ATCOM. On the due dates, ATCOM did not discharge its liabilities with SBI and Dena Bank. In the chargesheet, the particulars of the names of fictitious companies have been given. The said list covers 10 companies. It has been further mentioned in the chargesheet that the Proprietors/Directors of these fictitious companies had issued false bills under their signatures and discounted these false bills backed by the LCs, with the discounting Banks, at the instance of one Kanakranjan Jain. Some of these Proprietors/Directors are the employees and domestic servants of said Kanakrajan Jain. 7. After so stating the chargesheet proceeds as follows: That, in two of these fictitious companies, viz., M/s. Anew Electronics M/s. Covet Securities, Sh. Vikram Doshi (A-1) and Sh. Vineet Joshi, (A-2) were Directors for some period of time. These two companies were maintaining their accounts at United Western Bank. Sh. Vikaram Doshi (A-1) was also having his personal account in the same bank. From these two Accounts Sh. Vikram Doshi had received a sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d distinguished the pronouncement in A. Ravishanker Prasad (supra). 11. We have heard Ms. Pinky Anand, learned ASG and Mr. P.K. Dey, learned Counsel for the Central Bureau of Investigation and Arunabh Chowdhury and Mr. Anupam Lal Das for the Respondents. 12. In the backdrop of aforesaid facts the seminal question that arises is whether in the obtaining factual matrix the High Court is justified in quashing the criminal proceeding. Learned Counsel for the Appellants submits that the High Court has erroneously opined that the remaining offences are 406 and 420 of Indian Penal Code whereas the chargesheet, also included other offences against the accused persons. It is further contended that the chargesheet was not filed against the public officer as the allegation against public officer could not be substantiated during the investigation and the High Court without appreciating the gravity of the other offences has quashed the proceeding which makes the order absolutely vulnerable in law. Learned Counsel for the Respondent would contend that when No due certificate was obtained from the bank and the matter had been settled the High Court has correctly quashed the proceeding an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for availing huge credit facilities. In course of the pendency of the criminal proceedings, the accused persons had settled the outstanding dues by paying a sum of rupees 157 crores and on that basis preferred an application Under Section 482 of the Code for quashing of the criminal proceeding and the High Court quashed the proceedings on the basis of the settlement. Be it stated, the trial had progressed in the said case and 92 witnesses had already been examined. The question that arose before this Court was whether such a proceeding should have been quashed. The Court distinguished the decision in Duncans Agro Industries Ltd.'s case and opined that the tenor of the language implied therein indicates that quashing of the complaint depends on the facts of each case. The Court also distinguished the decision in Nikhil Merchant's case. 16. A three-Judge Bench in the case of Gian Singh v. State of Punjab and Anr. (2012) 10 SCC 303 while answering the reference whether the High Court has the jurisdiction Under Section 482 of the Code to quash a proceeding in respect of non-compoundable offences, after referring to number of authorities, ruled that Section 482 of the Code, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and have a serious impact on society. Similarly, any compromise between the victim and the offender in relation to the offences under special statutes like the Prevention of Corruption Act or the offences committed by public servants while working in that capacity, etc.; cannot provide for any basis for quashing criminal proceedings involving such offences. But the criminal cases having overwhelmingly and predominantingly civil flavour stand on a different footing for the purposes of quashing, particularly the offences arising from commercial, financial, mercantile, civil, partnership or such like transactions or the offences arising out of matrimony relating to dowry, etc. or the family disputes where the wrong is basically private or personal in nature and the parties have resolved their entire dispute. In this category of cases, the High Court may quash the criminal proceedings if in its view, because of the compromise between the offender and the victim, the possibility of conviction is remote and bleak and continuation of the criminal case would put the accused to great oppression and prejudice and extreme injustice would be caused to him by not quashing the criminal case desp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be caused to him by not quashing the criminal cases. 18. At this stage it is apt to notice a three-Judge Bench decision in CBI, ACB, Mumbai v. Narendra Lal Jain and Ors. 2014 3 SCALE 137 In the said case during the investigation pertaining to the culpability of the accused in the crime, the concerned bank had instituted suits for recovery of the amount claimed to be due from the Respondents and said suits were disposed in terms of the consent decrees. On the basis of the said consent decrees an application for discharge was filed which was rejected by the trial court but eventually was allowed by the High Court. Be it stated, charges were framed Under Section 120B/420 Indian Penal Code by the learned trial Judge against the private parties. As far as bank officials are concerned, charges were framed under different provisions of the Prevention of Corruption of Act, 1988. Being dissatisfied with the said order, the CBI had preferred an appeal by obtaining special leave and in that context the court observed that the accused Respondent had been charged Under Section 120B/420 Indian Penal Code and the civil liability of the Respondent to pay the amount had already been settled an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a part of the decree of the Court. There is no acknowledgement on the part of the bank of the exoneration of the criminal liability of the accused-Appellant unlike the terms of compromise decree in the aforesaid two cases. In the totality of the facts stated above, if the High Court has taken the view that the exclusion spelt out in Gian Singh (supra) (para 61) applies to the present case and on that basis had come to the conclusion that the power Under Section 482 Code of Criminal Procedure should not be exercised to quash the criminal case against the accused, we cannot find any justification to interfere with the said decision. 20. The present obtaining factual score has to be appreciated on the anvil of aforesaid authorities. On a studied scrutiny of the principles stated in Gain Singh (supra) it is limpid that the three-Judge Bench has ruled that proceeding in respect of heinous and serious offences and the offences under prevention of corruption Act and all other offences committed by public servants while working in that capacity are not to be quashed. That apart, the court has also emphasized on offences having a serious impact on society. It has been further laid down t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the High Court quashing the criminal proceeding and in that backdrop had taken note of the fact that accused persons had dishonestly induced delivery of the property of the bank and had used forged documents as genuine. Proceeding further the Court opined as follows: The offences when committed in relation with banking activities including offences Under Sections 420/471 Indian Penal Code have harmful effect on the public and threaten the well-being of the society. These offences fall under the category of offences involving moral turpitude committed by public servants while working in that capacity. Prima facie, one may state that the bank is the victim in such cases but, in fact, the society in general, including customers of the bank is the sufferer. In the present case, there was neither an allegation regarding any abuse of process of any court not anything on record to suggest that the offenders were entitled to secure the order in the ends of justice. 23. We are in respectful agreement with the aforesaid view. Be it stated, that availing of money from a nationalized bank in the manner, as alleged by the investigating agency, vividly exposits fiscal impurity and, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
